A Madrid judge has reduced by €16.4m the compensation to be paid by Santander to Andrea Orcel over the Spanish bank’s abortive attempt to hire the Italian as chief executive.
An amended ruling on Friday ordered Santander to pay Orcel €51.4m, down from the €68m decided last month. The judgment also said that rather than receive the full amount in cash, Orcel would receive €18.6m of the total in Santander shares over seven years based on the bank’s standard metrics for long-term incentive plans.
Last month’s ruling in the Madrid court brought to a head a long-running dispute between Orcel, one of Europe’s best-known investment bankers and now head of UniCredit, and Spanish lender Santander, his former client when he worked at UBS and Merrill Lynch.
Brought by Orcel, the case centred on Santander’s decision to withdraw an offer it made to him in 2018 when he was running UBS’s investment bank.
The original judgment levied €10m “for moral and reputational damages” to Orcel, as well as contractual items including €5.8m for two years of salary, a €17m sign-on bonus and €35m compensation for loss of long-term incentives at UBS.
But lawyers from both sides pointed out that this did not take into account payments Orcel had already received from UBS and so the judge reduced the amount awarded for loss of long-term incentives from €35m to €18.6m, according to court documents seen by the Financial Times. The judge’s revised ruling was first reported by Reuters.
Last May, Orcel halved his claim for compensation from Santander, having originally sought €112m.
Orcel alleged that the bank’s reversal of the decision it made in September 2018 constituted a breach of contract. In arguments ultimately rejected by the court, Santander claimed Orcel’s offer letter did not amount to a contract under Spanish law.
“We welcome this clarification and will resume the appeal process in due course,” Santander said but the bank continues to contest the judge’s findings.
Orcel was not immediately available for comment.